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In
depth I
IIRSA: infrastructure for the FTAA?
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Energy integration and security in Latin America and the Caribbean
Source:
Americas Program - Center for International Policy (CIP)
The integration of energy markets in Latin America has been discussed for more than three decades. An expression of it was the creation of the regional organizations ARPEL (Association of Petroleum Enterprises of Latin America), CIER (Regional Electrical Integration Commission), and OLADE (Latin American Energy Organization), during the decades of the 60s and 70s. April 2008.[see more]
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At the meeting of South American presidents held in Brasilia from August 31st to September 1st 2000, the Inter-American Development Bank (IDB) presented its “Plan of Action for the Integration of South American Infrastructure”. Thus, the foundations were laid for the initiative for Integration of Regional Infrastructure in South America (IIRSA), an ambitious plan aimed at facilitating regional and global trade through the implementation of physical projects and changes to legislation, rules and national regulations.
The IIRSA project is a multi-sectoral process that aims to develop and integrate transportation, energy, and telecommunications infrastructure in a 10 year-period. The idea is to organize the geographical landscape by developing a physical infrastructure of land, air, and river transport; oil and gas pipelines, waterways, maritime and river ports, and power lines and fiber optic cables, among others. These projects will be materialized in 12 integration and development hubs, corridors where investments will be concentrated in order to increase trade and create production chains connected to global markets, mainly in North America and Europe.
To carry out this mega-project, it is necessary to remove physical, regulatory and social “barriers”. This implies carrying out major works, harmonizing national legislation in the 12 countries involved in IIRSA, and occupying the key territories that in spite of being usually low-populated, represent the major reserves of raw materials and biodiversity in the region.
An ambitious project
At the Sub-Regional Seminar organized by IIRSA's Technical Coordination Committee and held in Lima in September 2003, three goals were defined:
- To support the integration of markets to improve intra-regional trade.
- To promote new production chains to achieve competitiveness in major global markets.
- To reduce the “South American cost” by creating a logistic platform both solid and well-inserted into the global economy.
Ten hubs have been defined, being most of them interconnected. Each one of those hubs comprises several countries:
- Andean Hub (Venezuela-Colombia-Ecuador-Peru-Bolivia)
- Southern Andean Hub (Chile-Argentina-Bolivia)
- Amazon Hub (Colombia-Ecuador-Peru-Brazil)
- Central Interoceanic Hub (Peru-Chile-Bolivia-Paraguay-Brazil)
- Capricorn Hub (Antofagasta/Chile-Jujuy/Argentina-Asuncion/Paraguay-Porto Alegre/Brazil)
- Guianese Shield Hub (Venezuela-Brazil-Surinam-Guyana)
- MERCOSUR-Chile Hub (Brazil-Uruguay-Argentina-Chile)
- Southern Hub (Talcahuano-Concepción/Chile-Neuquén-Bahía Blanca/Argentina)
- Southern Amazon Hub (Peru-Brazil-Bolivia)
- Paraguay-Paraná Waterway Hub (Bolivia-Brazil-Paraguay-Argentina-Uruguay)
Besides, a mega-project to link the Orinoco, Amazon, and River Plate river basins through a connection of 17 rivers to allow river transportation from the Caribbean to the River Plate is currently under study.
On the other hand, seven sectoral processes of integration were defined to address the institutional and regulatory obstacles posed to the project. The seven processes are: regional energy markets, operating systems for air, maritime, and multimodal transport, promotion of information and telecommunication technologies, facilitation of border crossings, and financial instruments.
Total investments would amount to 37 billion dollars. The whole of IIRSA project will be financed by the IDB, the Andean Development Corporation (CAF), and the Financial Fund for the Development of the River Plate Basin (FONPLATA), in addition to important contributions by Brazil’s National Economic and Social Development Bank (BNDES).
Indeed, part of these projects are already underway, although their connection with IIRSA is not mentioned. According to CAF's 2002 Annual Report, nearly 300 physical integration projects were identified in South America at the time, 140 of which were ready to begin right away and 60 IIRSA-related projects were already underway: 40 for transportation, 10 for energy, and 10 for telecommunications.
What lies behind IIRSA?
IIRSA appears to be strongly linked to the FTAA (Free Trade Area of the Americas) to the point that researchers Marcel Achkar and Ana Domínguez state that “the FTAA deals with legal and administrative issues” while IIRSA provides the infrastructure needed to materialize such trade liberalization project promoted by the United States. At the same time, both seem to be linked to a broader project which also includes the Puebla-Panama Project.
However, as argued by journalist and researcher Raúl Zibechi, IIRSA has the peculiarity of being “a Southern-born type of integration, managed to a great extent by Southern elites, but benefiting those sectors that are best inserted into the global market”. The emphasis placed on infrastructure projects seems to have grown out of the need for global markets to access a stable and increasing flow of raw materials and natural resource exports. And this has to be done in a competitive way, that is, by reducing costs. Critical analyses of the project maintain that this type of development will result in more poverty and greater inequalities, further concentrating wealth on a local and global scale and causing severe environmental impacts. Among other negative consequences, the external debt of the countries within the region will continue to grow and the overexploitation of resources may lead countries that now depend on oil or natural gas as their main source of income to end up exhausting their reserves in a few decades without having truly benefited from them.
Finally, the way in which IIRSA is being implemented raises serious concern, since projects are being carried out silently. While throughout the continent broad debate is taking place over the FTAA and FTAs (Free Trade Agreements), IIRSA-related projects are being implemented without neither the participation of civil society nor of social movements and without any information being released by governments. Meanwhile, projects are being built separately at the same time to be linked at a later date, which prevents surveillance and control of affected communities, and encourages the sidestepping of environmental regulations.
The most disturbing aspect is whether or not the setting up of this large infrastructure network will finally end up imposing the same goals as the FTAA - only without that name - with no debate and in a vertical way by global markets and national elites. If this is the case, maybe a few decades from now a huge, continent-wide remodeling project affecting all South Americans will have been quietly completed.
Source:
IIRSA: Integration custom-made for international markets
By Raúl Zibechi
Versión
en español
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In-depth
reports |
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reports on key issues |
Financing for Development
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External debt
In the last two decades, the external debt has been a huge problem that third world countries have to face. This situation has generated a “spiral of poverty” where once inside it, is very difficult for developing countries to get out.
FTAA: a new colonialism?
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Free Trade Agreements - FTAs
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World Bank
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Economic, social and cultural rights - ESCR
ESC rights are valid, enforceable, justiciable and claimable under both local and international law. Civil society is campaigning for their full implementation.
Corporate accountability
How big business handle big issues like human rights and sustainable development.
Permanent Forum on Indigenous Issues
It promises to give indigenous peoples a unique voice within the UN system.
The water crisis
If access to water is a basic human right, should its provision be left in the hands of private corporations?
World Trade Organization - WTO
Trade at the service of people, or people subjected to trade? The WTO makes the difference.
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Two key summits in Bolivia suggest a new paradigm for IIRSA
Source: BICECA
Vince McElhinny
Update on two important Summits -- one official, and one organized by civil society -- that took place between the 5th and 12th of December, 2006, in Cochabamba, Bolivia, and their implications for IIRSA and the model of regional integration. February 2007.
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